The Appellate Tribunal, Madras Bench, referred under section 66(1) of the Income-tax Act the following question for the opinion of the High Court:

“Whether there is any material for the finding that the dealing in forward contracts carried on by the applicants in the Rangoon grain market is a distinct and separate business from the dealing in ready goods of same commodities.”

The facts relevant for the case are as follows:The applicants are an undivided Hindu family carrying on business in grains and rice at Tuticorin and Virudunagar. The mode adopted by them in the business is to buy grain and rice at Rangoon through their agents and import them to Tuticorin where the goods are sold. In the accounting year 1937-38 they also carried on business in what are described as Satta contracts or forward contracts of purchase and sale and dealing in differences. Such contracts related also to the same commodities in respect of which they had also made ready purchases. In the next year of account 1938-39 they did not deal in forward contracts, but revived them again in the two succeeding years. These dealings in forward contracts ended in loss which was larger than the profits earned b